Empirical study of consumer behaviour in health insurance sector

Abstract

This article devoted to the analysis of consumption of services held under Health Insurance, which pertains to utilization of health services. Health utilization behaviour of the sampled households was observed by obtaining information on different health variables like monthly health expenditure, health risk, health status, types of morbidity and hospitalization. It also encompasses information about choice of treatment and choice of type of health facility -public/private. A comparison of insured and uninsured households was made in the study so as to comprehend the difference in their health utilization behaviour. An earnest effort has been made to examine the level of satisfaction regarding Health Insurance policy among the insured household and also focused on the two major issues of Health Insurance sector related to the presence of information asymmetries viz Adverse Selection and Moral Hazard. Due to better private information about their health status, the insured may have a positive association between health risk and purchase of Health Insurance (Adverse Selection). Besides, the consumers might have a tendency to over utilize the health services because they are available at lower cost due to purchase of Health Insurance (Moral Hazard). Presence of both these problems is empirically tested in this paper.